Bullish or Bearish? Week of Nov. 20, 2017

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 is above its 50-day MA = Bullish

MACD (S&P 500; 19,39,9) is above its zero line = Bullish

MACD (S&P 500; 19,39,9) is has fallen below its signal line = Bearish

S&P 500 support @ 2560

 

Sentiment Indicators (+RSI)

II survey: (Nov. 14): 63.5% Bulls; 15.4% Bears = Bearish

AAII survey: (Nov. 15): 29.4% Bulls; 35.2% Bears = Neutral

VIX: @ 11.43 = Bearish

RSI: (S&P 500) @ 55.24 = Neutral

Comment: Notes: MACD sell signal was triggered, which has led to short term pullbacks.  AAII bullish sentiment plunged but not enough; market did fall last week but recovered. Holidays are usually bullish so let’s see what happens. Because of the holidays, it’s possible any major pullback will be delayed until early next year, but be on guard. Also, fund managers go through their annual ritual of buying anything that moves to gin up their averages to beat the benchmark and lock in a juicy compensation. It would be unusual if the market fell over the next few months, but anything is possible. The odds are we are going to limp into the end of the year, but I will watch for signs of further derioarrion (like last week). Next week will be light trading so anything is possible.

I hope everyone has a great Thanksgiving!

Bullish or Bearish? Week of Nov. 13, 2017

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 is above its 50-day MA but pointing down = Neutral

MACD (S&P 500; 19,39,9) is above its zero line = Bullish

MACD (S&P 500; 19,39,9) is equal to its signal line = Neutral

S&P 500 support @ 2560

 

Sentiment Indicators (+RSI)

II survey: (Nov. 7): 64.4% Bulls; 14.4% Bears = Bearish

AAII survey: (Nov. 8): 45.1% Bulls; 23.1% Bears = Neutral

VIX: @ 11.29 = Bearish

RSI: (S&P 500) @ 61.93 = Neutral 

Comment: For the first time in months, the market retreated strongly during the day before recovering some of its losses. Astute market watchers noticed that something changed during the week, i.e. increased selling, which was reflected in a number of indicators. One week does not make a market, which is why this week is so important. The bulls are still in control but their grip appears less strong. Let’s see if the uncertainty carries over into this week.

For a more detailed analysis of the market, here is Lance Robert’s most recent blog. He believes a 3-5% correction is likely: https://goo.gl/BijbDq

 

Bullish or Bearish? Week of Nov. 6, 2017

Here are the latest technical and sentiment indicators:

Technical Indicators (daily chart)

S&P 500 is above its 50-day MA = Bullish

MACD (S&P 500; 19,39,9) is above its zero line = Bullish

MACD (S&P 500; 19,39,9) is equal to its signal line = Neutral

S&P 500 support @ 2560

 

Sentiment Indicators (+RSI)

II survey: (Oct. 31): 63.5% Bulls; 14.4% Bears = Bearish

AAII survey: (Nov. 1): 45.1 Bulls; 28.6% Bears = Neutral

VIX: @ 9.14 = Bearish

RSI: (S&P 500) @ 70.40 = Overbought 

Comment: There is not much change from last week except that more retail investors are catching the bull fever. Technical readings are bullish while sentiment is so bullish it’s a red flag.  While some pros are predicting a major correction, others keep blindly buying at all time highs. Eventually, the market will stop climbing but for now, the bulls are in control. Lately, investors are hopeful there will be another Christmas rally. We shall see.